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Can you summarize KYRS 355.4-406?
Bank Deposits and Collections > Customer's duty to discover and report unauthorized signature or alteration.
Short Summary
This legal document, part of the Kentucky Revised Statutes under the Uniform Commercial Code, pertains to the duty of customers and banks regarding the discovery and reporting of unauthorized signatures or alterations. According to the document, if a bank sends a statement of account or items to a customer, the customer must promptly examine them to determine if any payment was unauthorized due to alteration or unauthorized signature. If the customer should have reasonably discovered the unauthorized payment based on the provided statement or items, they must promptly notify the bank. Failure to comply with this duty may preclude the customer from asserting against the bank the unauthorized signature or alteration. However, if the bank failed to exercise ordinary care in paying the item and the failure contributed to the loss, the loss is allocated between the customer and the bank. Additionally, if the customer does not discover and report the unauthorized signature or alteration within one year, they are precluded from asserting it against the bank. The document does not mention specific penalties for non-compliance or violation.
Whom does it apply to?
Customers and banks
What does it govern?
Customer's duty to discover and report unauthorized signature or alteration
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No specific penalties are mentioned.
Jurisdiction
Kentucky